The devaluation of the Malawian kwacha against the US$ by nearly half, has resulted in SAA suspending its ticket sales in Malawi. However, flights and bookings to Malawi continue.
On November 8, the Reserve Bank of Malawi devalued the kwacha by 44% to MWK1 700 against the US$, from its previous level of MWK1 180.
SAA, which resumed its flights between South Africa and Malawi in March this year, confirmed in a press statement on November 9 that Malawi sales were immediately discontinued.
“In light of yesterday’s devaluation of the Malawian kwacha by 44% against the USD, South African Airways has made the difficult decision to suspend all air ticket sales that are bought in Malawi with immediate effect,” says the statement.
“Bookings and sales for tickets from outside Malawi, purchased in any other currency continue. Similarly, flight operations between Johannesburg and Lilongwe and Blantyre are continuing uninterrupted.”
SAA CEO, Prof John Lamola, said the decision was a risk management intervention in response to Malawi’s current economic conditions, relating to acute foreign current shortages.
“This should not be interpreted as a step back from the airline’s commitment to serving the people of Malawi and promoting trade links between South Africa and Malawi.” He indicated that the airline would closely monitor the situation and would resume sales and ticket services from Malawi when the situation warranted it.
Many African states are plagued by foreign currency shortages. In April this year, Iata said in Africa, about US$1.6bn was then being withheld from airlines, accounting for 66% of all blocked airline funds globally. All blocked airline funds globally together amounted to US$2.4bn.
Some observers believe the Central Bank of Malawi has devalued the currency in anticipation of receiving an Extended Credit Facility, a form of financial assistance, from the International Monetary Fund – the IMF board is expected to meet this week and give a decision.